Cash-strapped Einstein Moomjy files for Chapter 11

By HUGH R. MORLEY

Staff Writer |

The Record

Einstein Moomjy, the 63-year-old rug store with its flagship showroom in Paramus, has filed for bankruptcy re-organization and cut its operations to the bone in the face of plummeting revenue brought on by the housing slump and recession.

Einstein Moomjy, the up-market rug store with its flagship showroom in Paramus, filed for bankruptcy re-organization.

The company, started in 1948 by Iranian and German immigrants, has slimmed its workforce from more than three dozen to just a pair of unpaid employees and members of the Moomjy family who run the company's three stores, in Paramus, North Plainfield and Whippany, the company's bankruptcy attorney said.

Daniel M. Stolz, the Millburn-based attorney, said Einstein Moomjy hopes that a bankruptcy sale, expected to take place in late September or early October, at the three stores will enable the company to get back on its feet and continue to operate North Plainfield and Whippany stores. The lease on the Paramus store expires in February, he said, and the company does not expect the landlord to extend it.

"There is hope that these sales would raise enough money to keep the creditors happy and allow the Moomjys to continue in business," Stolz said.

In Chapter 11 bankruptcy papers filed Aug. 19, Einstein Moomjy reported assets of $2.5 million and liabilities of $4.47 million, about half of that for unpaid rent.

"The economy has been killing them," said Stolz. "They kept hoping that the economy was going to turn around. They kept waiting and waiting for it [business] to pick up, and it just hasn't been the case."

Revenue so far this year is about $921,000, compared to $6.65 million in 2010 and $13.35 million in 2009, court papers show.

The company shuttered its New York City showroom last year, closed one of two Paramus stores and also shut a warehouse in Pine Brook in an effort to contain costs, Stolz said. But that wasn't enough to cope with the dramatic decline in business, he said.

The remaining stores accept only cash and checks, because credit companies will no longer do business with the stores after some customers reversed charges because they did not get the items ordered, the attorney said. The company faces at least 18 lawsuits, some from creditors, court papers show.

Customers who put down a deposit for merchandise will "all get their deposits back," Stolz said.

The bankruptcy filing lists 38 employees, of whom 26 are owed back wages, among them owner and founder Walter Moomjy and his daughters Claudia and Andrea.

"It's devastating," said Andrea Moomjy. "My father ran a fantastic business for many years. My father would do anything for a customer. Obviously, it's a difficult time when you spend your life doing something and then it unravels."

Even before the recession, the company suffered from the collapse in the housing market, she said.

"My grandfather used to say this years ago: 'When the economy starts weakening, people in flooring feel it first, because that's where they [consumers] can cut back first," she said. "And then in the recovery, we are the last to feel it."

Einstein Moomjy was started in 1948 by Ted Einstein, who fled Nazi Germany, first to France and then New Jersey. He later joined forces with his with his brother Ernest and two Armenian immigrants, Walter and Albert Moomjy, who opened their first store in 1955.

Ted Einstein died in 1992 and Ernst died seven years later. The company is now wholly owned by Walter

At its peak in the 1990s, the company had 150 employees and seven stores, including one in Willowbrook Mall, Andrea Moomjy said.

Stolz said Einstein Moomjy now hopes that a bankruptcy sale, expected to take place in late September or early October, at the three stores will enable the company to get back on its feet and operate from the North Plainfield and Whippany stores. The lease on the Paramus store expires in February, he said.

"There is hope that these sales would raise enough money to keep the creditors happy and allow the Moomjys to continue in business," Stolz said.

E-mail: morley@northjersey.com

Correction

An earlier version of this article misstated the ethnic heritage of the Moomjys. They are Armenian immigrants.

Cash-strapped Einstein Moomjy files for Chapter 11

Einstein Moomjy, the 63-year-old rug store with its flagship showroom in Paramus, has filed for bankruptcy re-organization and cut its operations to the bone in the face of plummeting revenue brought on by the housing slump and recession.

Einstein Moomjy, the up-market rug store with its flagship showroom in Paramus, filed for bankruptcy re-organization.

The company, started in 1948 by Iranian and German immigrants, has slimmed its workforce from more than three dozen to just a pair of unpaid employees and members of the Moomjy family who run the company's three stores, in Paramus, North Plainfield and Whippany, the company's bankruptcy attorney said.

Daniel M. Stolz, the Millburn-based attorney, said Einstein Moomjy hopes that a bankruptcy sale, expected to take place in late September or early October, at the three stores will enable the company to get back on its feet and continue to operate North Plainfield and Whippany stores. The lease on the Paramus store expires in February, he said, and the company does not expect the landlord to extend it.

"There is hope that these sales would raise enough money to keep the creditors happy and allow the Moomjys to continue in business," Stolz said.

In Chapter 11 bankruptcy papers filed Aug. 19, Einstein Moomjy reported assets of $2.5 million and liabilities of $4.47 million, about half of that for unpaid rent.

"The economy has been killing them," said Stolz. "They kept hoping that the economy was going to turn around. They kept waiting and waiting for it [business] to pick up, and it just hasn't been the case."

Revenue so far this year is about $921,000, compared to $6.65 million in 2010 and $13.35 million in 2009, court papers show.

The company shuttered its New York City showroom last year, closed one of two Paramus stores and also shut a warehouse in Pine Brook in an effort to contain costs, Stolz said. But that wasn't enough to cope with the dramatic decline in business, he said.

The remaining stores accept only cash and checks, because credit companies will no longer do business with the stores after some customers reversed charges because they did not get the items ordered, the attorney said. The company faces at least 18 lawsuits, some from creditors, court papers show.

Customers who put down a deposit for merchandise will "all get their deposits back," Stolz said.

The bankruptcy filing lists 38 employees, of whom 26 are owed back wages, among them owner and founder Walter Moomjy and his daughters Claudia and Andrea.

"It's devastating," said Andrea Moomjy. "My father ran a fantastic business for many years. My father would do anything for a customer. Obviously, it's a difficult time when you spend your life doing something and then it unravels."

Even before the recession, the company suffered from the collapse in the housing market, she said.

"My grandfather used to say this years ago: 'When the economy starts weakening, people in flooring feel it first, because that's where they [consumers] can cut back first," she said. "And then in the recovery, we are the last to feel it."

Einstein Moomjy was started in 1948 by Ted Einstein, who fled Nazi Germany, first to France and then New Jersey. He later joined forces with his with his brother Ernest and two Armenian immigrants, Walter and Albert Moomjy, who opened their first store in 1955.

Ted Einstein died in 1992 and Ernst died seven years later. The company is now wholly owned by Walter

At its peak in the 1990s, the company had 150 employees and seven stores, including one in Willowbrook Mall, Andrea Moomjy said.

Stolz said Einstein Moomjy now hopes that a bankruptcy sale, expected to take place in late September or early October, at the three stores will enable the company to get back on its feet and operate from the North Plainfield and Whippany stores. The lease on the Paramus store expires in February, he said.

"There is hope that these sales would raise enough money to keep the creditors happy and allow the Moomjys to continue in business," Stolz said.